I'll echo others. There ain't any bestselling hardcovers on Amazon that are $26. They are in the $12-$16 range.

And considering the reseller doesn't have to keep warehouses full of books and you don't have to have distributors who take a cut etc then the cost for an e-book should be under $10. $9.99 was too much.

The problem is the publishers want to make even more money off ebooks than they were with hardcovers and paperbacks.

Hell publishers can start their own site. Put a computer in the basement and have it serve up millions of books. They take up next to no room. BAndwidth and computing power to do that is dirt cheap. And make a simple program to download the books and throw them into iTunes like Amazon does with mp3s.

One thing for sure is these guys are never going to price things too low.

You do know that whatever the selling price the retailer decides on, the publisher was still getting the same price right? If some retailers wished to take a tiny margin or even make a loss-leader, that doesn't change any of the other figures.

So take their cut of $13 and minus the $3.25 that goes into printing, shipping, and storing books. Add on the 30% cut that Apple would get. I seem to get a price of $13.93 ($13.99 rounded up). And that's giving them the exact same profit, not any more. So I don't know where you're getting your "$9.99 is just too much" math from.

I understand that you don't find that amount of value in the product and you're fully justified to feel that way. Just don't insist that the math backs your argument and the publishers are just greedy. Your simple server solution still neglects the fact that even with all the physical medium's costs factored out, ebooks would still not be as cheap as you would like them to be.

And also remember that ebooks should come down in price over time like normal books do as initial costs have been paid off. If they don't, then we all surely have something to complain about.

Using the figures the publishers themselves quoted, they make $13.67 profit on a $26.00 ebook. The same $26.00 paper book gets them something like $4.00 profit. So they are making four times the profit per ebook.

That's why the ebooks aren't 26 bucks, next time read what you write before submitting it

All these costs have nothing to do with distributing physical books. With the e-Book in play, I could see a lower cost publisher that does everything that the current publisher's do minus printing, storing, and distributing the physical books.

Plus, with iTunes and Amazon, the middle-man expenses are much less, as you don't have to support stores like Barnes and Noble who need to pay rent and hire employees.

OK, so I don't get your argument. Especially if you've actually read the article.

If you take a typical $26 hardcover book, of which the publisher gets $13 to take care of costs, and the minus the $3.25 per book for "printing, storing, and distributing the physical books", and add on Apple's 30% cut, you come to just a hair under $13.99 which is right in the middle of the article title's range.

That's taking out the middle man who could give you the deep discounts out of their 50% cut. That's taking out the physical medium costs. That's using Apple or Amazon (under the new model) as an outlet. Actually I forgot to add the $.50 per book to convert to digital (which shouldn't ever be totally automated.) So where's the savings suppose to come from? You can only cut production costs (which would affect the quality of the ebook) or royalties (which definitely won't go over well with authors who were told they would get more with this setup)

I hear that you believe the price is too high for the market. In that regard I agree. I'll just wait to see if the price will decrease over time like normal books do. If they do so, then I have no complaints about it's initial cost. That's a setup I'm used to.

1 DOLLAR. That is the fair price for something that can be replicated for ever at no cost. The same for any CD, DVD or Blu-ray downloaded from their owners using P2P. They increase worldwide sales thousands of times. Piracy disappears overnight. Everybody wins.

I'll echo others. There ain't any bestselling hardcovers on Amazon that are $26. They are in the $12-$16 range.

And considering the reseller doesn't have to keep warehouses full of books and you don't have to have distributors who take a cut etc then the cost for an e-book should be under $10. $9.99 was too much.

The problem is the publishers want to make even more money off ebooks than they were with hardcovers and paperbacks.

Hell publishers can start their own site. Put a computer in the basement and have it serve up millions of books. They take up next to no room. BAndwidth and computing power to do that is dirt cheap. And make a simple program to download the books and throw them into iTunes like Amazon does with mp3s.

One thing for sure is these guys are never going to price things too low.

One thing you're leaving out - support for the purchases. Digital retailers may not have warehouse space, but they require support staff. I have many clients that self-publish digital information products. Prices range from $17 to $2500.

One thing they have in common is full time person(s) to handle support suppot requests for their orders. People have a hard drive crash. People forget their username and password. Their email changed, so they need that changed. If something is DRM'd and the customer uses a new computer, there's a support request. If there's a Windows DRM scheme used and the customer has a Mac, there's a support request. And, believe it or not, some people call and ask why their "book" never arrived in the mail.

Based on my client's customer size, I'd hate to imagine the amount of customer support larger operations need.

So no one can actually show any proof that Amazon is taking a loss, yet no one seems to question this?

It's a bonifide fact. The publishers have said that they were getting the same cut they usually get regardless of Amazon's price so Amazon was most definitely selling those as loss leaders. And contrary to popular perception, Amazon wasn't selling all of their ebooks for $9.99 or less. They were selling the popular ones at a loss to bring in readers.

"Amazon buys and resells e-books in the same way it handles printed books, by paying publishers a wholesale price that is generally equivalent to half the list price of a print edition. Because Amazon has discounted the price of most new and popular e-books on its Kindle e-reader to $9.99, it loses money on most of those sales."

I fully understand the marketing strategy and financial logic behind the higher premium prices for e-books, HOWEVER, I still believe it's all verging on ridiculous. I think a "sweet spot" from a CONSUMER VIEWPOINT for e-book prices would be between $3.99-$6.99. Yes, I know this is impossible financially due to the various royalties & costs involved by the publishers, but $12.99-$14.99 will make me very less likely to purchase their books. The ONLY exception would be textbooks. I will be willing to pay top-dollar for textbooks that don't weigh 10 pounds in my bag.

Yes, from my point of view that's a nice sweet spot as well.

And if publishers are sincere in their stated intent on letting ebooks price decrease with time to match their physical book twin after initial costs have had a chance of being paid off, then we should see prices dip toward those figures. If that happens, then I have no problem with their higher initial costs.

I would really be happy to see this price spread with the first books to get offered on the iPad. I hope they aren't just going to offer the bestsellers now. We'll just have to wait and let the publishers show their hand.

Totally: Publishers are just like the music industry. They are not certain what to do in order to keep up with the changes and still make a profit. But, since Ebooks are the future...they will figure it out. It would be nice if they would be pro-active (unlike the music industry which is accurate in suspecting consumers of widespread piracy). If they fail to figure it out, they will die..just like land lines are dying and carburetors have been dead for years.

Like all the articles I've seen on this topic, the paperback phase pricing of ebooks remains unaddressed.

I agree. And even though publishers like Macmillan have voiced their intent to do so, the history of ebook pricing doesn't reflect that well. So we'll just have to wait and see. It would be great if the iBooks store launched with a price spread of ebooks! I don't know if we'll see that this early though.

How does this author do this before they become well known? Who pays their expenses then? Should they mortgage their house, if they have one? Ty to take a loan out from a bank (which won't give it to them for this anyway)?

Guys like Dan Brown and Patterson get millions as an advance on every book they write. If they leave the publisher, that won't happen. Most of them are quite content where they are. The reason why most authors move to different publishers is because they don't think they're being promoted enough, aren't being given the best editors, etc.

How will that work when there is no publisher?

The strategy would likely not work for unknown authors unless they could find financial backers. A super star author like JK Rowling already did a limited edition book deal with Amazon, and Steven King did a limited "e" book with (I think) Amazon also. For the well-known authors the publicity would likely be provided by Apple or Amazon.

The problem is that you can get ebooks from your local library. Why pay for a book from these publishers when you will be able to get it for free on your ioad from your local library

Ps you can take them out from home using your library card

You know, booksellers have existed just fine alongside libraries for ages. And many people like to own a permanent copy (physical or electronic) instead of borrowing it for a short time. And the selection of books (especially ebooks) from the library will not be all-inclusive.

I wonder why publishers are afraid of killing the Barnes and Nobles. What about the mom and pops that B&N killed? Apple will just take their place, amongst others. If Amazon couldn't kill the brick and mortars, certainly Apple can. Too bad, the model they are trying to protect needs to evolve, not get artificially stifled.

Such is the way of capitalism. So what if Borders and Barnes and Noble die, there will be someone to take their place. They aren't dying from lack of demand, they are dying because they are antiquated.

The problem is that you can get ebooks from your local library. Why pay for a book from these publishers when you will be able to get it for free on your ioad from your local library

Ps you can take them out from home using your library card

Our library offers digital loans. One problem is that even though are digital, there are a set number who can have the title signed out at one time. If you must have a book at a set time, say for a school book report, you must buy or find someone else to borrow from.

I would have to ask the question: If you were getting by just fine on $9.99 prior to the iPad rollout, then what is the excuse to claim the additional $4 bucks is needed, except to gouge the customer?

If it wasn't profitable, they wouldn't be selling it, even at $9.99.

Sigh, as has been reported many places before, Amazon was selling those $9.99 ebooks as a loss leader. The publishers weren't losing money because Amazon was paying them half the list price of the physical book. The publishers were getting afraid of the power that Amazon was amassing. Kind of like the electronic version of Wal-Mart. They wanted a more sustainable model that let other stores compete against Amazon and didn't undervalue their goods in the public's eye. Which the $9.99 price for bestsellers was.

"Amazon buys and resells e-books in the same way it handles printed books, by paying publishers a wholesale price that is generally equivalent to half the list price of a print edition. Because Amazon has discounted the price of most new and popular e-books on its Kindle e-reader to $9.99, it loses money on most of those sales."

These charts show the publisher's gross in shades of green with the lightest green being the publisher's net. Remember, until recently, Amazon was taking 70% of gross, not the 30% shown in these charts. At $13.99, publishers will make about the same as they do now with hardcovers. Authors benefit from the eBook price structure.

I don't know how the publishers can possibly predict how much it will cost or how much profit they make on e-books when they have no idea how many e-books they will sell. Sales determine final costs but I really think that 50¢ per digital copy is way too high.

I have laid out books before and using templates, style sheets and other shortcuts it shouldn't take too long. All the editing is done for the print copy and all you need is RTF text of the book and QuarkXPress or InDesign to do the layout which should be a streamlined and fairly easy process.

Once laid out the only other thing to do is add the digital tags for turning pages and the such. Again, it's a mortal lock that process is automated too.

I would love to buy an iPad as I am a voracious reader but at $12-$15 for an e-book the cost is way too high. I rarely buy hard covers for more than $18 and for me it would be a no-brainer to spend the extra 5 or 6 bucks to get hard copy.

People who don't like technology or enjoy the visceral feel of a book will always buy hard copy but the real market for Apple and it's publisher partners are people like us. We are comfortable with technology, we still read a lot and an iPad is certainly a much better alternative than a Kindle. The sticking point is cost. Show me a digital book for less than the cost of a paperback, which runs generally around the 8 dollar mark, and I switch. I like the visceral feel of books too and certainly I can build more bookshelves to house more books but I also like reading in bed or when I travel and the idea of a couple of dozen books on my iPad or easily adding another one when needed sounds too good to be true.

I'm all for everyone getting paid but it sounds to me that the fly in the ointment here is Apple. They want 30% from every e-book? That's way too much by half IMHO. They are sounding more and more like Microsoft every day and I say that with great sorrow. I have been a Mac user since 1992 and I have bought or traded for dozens of Macs. I love Macs. I love Apple. I'm not a fan of price gauging even from my favorite company. I hope they charge reasonable prices for their content because I really want an iPad and the only way I justify it to my wife is if there is a viable e-book option. She reads a lot too.

Publishers get roughly half -- $13 -- of the selling price of a book. But after factoring in payments to the author and the cost of cover design and copy editing, only about $4.05 is left. And, the report noted, that doesn't even include overhead such as office space and electricity.

Author's royalty can range from $2.27 to $3.25 on an e-book, leaving the publisher with between $4.56 and $5.54, before paying overhead costs. For comparison, under Amazon's $9.99 e-book model, publishers would take in between $3.51 and $4.26 before overhead.

Did anyone pay attention to the article? It basically states that Amazon's $9.99 pricing nets the publishers nearly as much profit as the sale of a hardcover version. A hardcover sale averages around $4.05 in profit and an Amazon sale comes in between $3.51 and $4.26. Given that the variable factor mentioned was the author's royalty fee which had a 98 cent range, one can approximate that the range of profit for a hardcover book is between $3.56 and $4.54. Not far off the Amazon range at all.

So what it comes down to is that the publishers are pissed off that they're not making MORE money off of digital sales than the print version. Except that the new prices under Apple only make them about a dollar more per sale. But chances are the higher prices will actually cost them sales so for each lost sale, they're going to have to sell 4 extra copies to make it back up.

Apple and the publishers can go ahead and charge $13-$14 a e-book, however if they included a rental price of half that amount, they would see tremendous amount of activity and Apple's iPad sales would skyrocket.

Rentals of e-books would be a tremendous profit potential as it's in the reach of more people at a lower price point than buying would be. Most people who are considering the iPad as a e-reader will be put off by it's $499 price tag, unless they knew they could get rent their books cheaper than buying it at $9 on a Kindle like they were used too.

Do you realize that most people know if you wanted to "rent" a book the best place is the library.

That's why they only intend to charge $12-$14 for the ebook, not $26. Where is the BS here?

Two things:

1. Why are we comparing ebooks to hardcovers? Why not to paperbacks?

2. The NYT article is very disingenuous. Read it carefully. Let me give you a couple of examples:

After allocating $0.80 for design, typesetting, copy-editing, it turns around and says "the publisher is left with $4.05 out of which it must pay for editors, cover art designers, ...

The it says that "print book sellers cannot sustain 3 to 5 percent of the market taken up by ebooks" and later on claims that they will cause bookstores to go out of business.

The easy thing to do is to increase the price of hard covers to adjust for the loss in sales. The aficionados and collectors will still be buying. And then reduce ebook prices to a provide a similar return as that of paperbacks. This will increase sales tremendously and make books much more accessible to the general public.

Can't speak to this, but I'm a university professor, and I can tell you that publishers have been incredibly resistant to making electronic versions of textbooks available. A big part of this is that e-textbooks could/would significantly damage the economy of entrenched campus bookstores.

Many campus bookstores rely on textbook sales as the majority of their income, so the loss of too many paper copies of textbooks would threaten the survival of campus bookstores, and in turn the loss of staff and student jobs, and many sales representatives and customer service and support jobs as well. This is particularly true of smaller campuses that contract out their bookstore management to companies like Barnes and Noble; they face the same issue as their general bookstores in terms of being too badly undercut by e-book sales.

I personally would love to have electronic versions of the textbooks I use for my classes, as well as other books I use on a regular basis for reference, programming, etc. It would literally revolutionize my work flow; I would use an iPad as an e-reader alongside my MBP and it would save me from having to carry literally thousands of pages of books back and forth with me from my office to my home. Of course, this is assuming some kind of unified DRM system could be had along with a durable mark-up protocol that would allow me to make notes and annotations within the electronic books I would use.

Regardless, part of the issue is that it's simply easier to stick with the established system, because even though they might net more profit by going electronic, the cost and the potential loss of content control seems currently too great for them to follow that path.

For me, that makes something like an iPad or even a Kindle a device of very low utility.

Do you realize that most people know if you wanted to "rent" a book the best place is the library.

Not really, libraries differ, some have a homeless problem, some don't carry nearly any sort of selection worth bothering with, some require traveling a great distance to access, and if you find a book you like odds are someone else has it out already or they have to order it, sometimes it's just to dam cold (or hot) to go, etc. That's the penalty for little or no cost renting.

There is a large market for e-book rentals like movie rentals, people read for enjoyment and then really have no further use for it. (if they want to keep it, then they get to apply the rental price to the e-purchase price). The vast electronic library would be nearly instantly available to anyone with a device and a net connection.

Publishers were fine getting 50% of Amazons $9 e-book prices, and the math for the $13-$15 iBookStore also netted them about $4.50 profit per e-book as well.

I see room for iBookStore e-book rentals coming in the iPad's future. Rental volume will be orders of magnitude larger, as e-book rentals is a untapped market and it's a lower price point for consumers.

With e-book rentals being half the cost of a say $14 e-book purchase price, and publishers getting their 70% (Apple getting 30%) that still nets $4.90 per book, about what the net is on the purchase price on Amazon. (thus why I feel Amazon was jammed up by publishers so quickly after the iPad announcement, they needed to adjust prices to take advantage of the more affluent Apple market)

Publishers see e-books sales and rentals as a extra avenue of revenue with a product they already have invested in with traditional paper books, merely transferring the existing prepared electronic files over to Apple/Amazon is all that's needed.

However if e-books were to seriously erode the traditional paper book model, some of those traditional costs would have to be applied to e-books and the models of renting and buying reworked. I doubt that will happen anytime soon, as the barrier to entry for e-books with the iPad is a whopping $499, plus internet connection fees and one can't resell the book to recoup.

Apple is leveraging their iPad in the MacBook space to gain the fastest adoption possible, thus e-book rentals would surely be coming, just like movie rentals in iTunes.

E-book rentals also work in favor of publishers because it allows them more viewing and profit control. One reads the book and it's yanked off the device. Right now with traditional paper books, one copy could be read by hundreds of people.

My guess is right now Amazon has to work their site and create a rental model, we all know Amazon can yank e-books off Kindles, so it shouldn't be too much of a issue for them.

It won't, because the utility of a real book is worth more than the printing cost. Also, there's no reason to actually pay the full MSRP. The retailers have half the price as a margin to play with, so the price differential is nowhere as large as they say. (See the Harry Potter book releases for example.)

I don't believe people are going to pay $7 for something that is free at the local library.

As I said, there's no reason to pay MSRP. I have no idea where you are currently situated, but Amazon ships pretty much everywhere.

And the fact is, I think that most Americans buy paperbacks. Sure you can get hardcovers if you want the latest book immediately, but the fact that they all end up in paperback for less than $10 at Walmart and most grocers, just shows to me that most Americans buy paperback.

And if I at average pay around $7 for a paperback, why would I pay $15 for an ebook that I can't borrow or resell to someone else. I mean a huge market exists for $1 or less books at fleamarkets. It is scary to think some people will be even less literate.

For digital media, its need to be competitive and needs to drop to $7 or less when the paperback comes out (this hasn't been mentioned). In addition I need to be able to borrow this media unlimited times. Obviously when I have it 'borrowed' out I should not be able to use or read it. I addition, I should be allowed to resell my 'copy' for whatever price I wish to.

There needs to be regulation to cover this. As there should be no reason why I can't legally take an MP3 and sell it to someone else, provided I fully transfer the copy of the MP3 and destory all copies I have.

I really don't care what a publisher's fixed costs are. If I like or want the book, I'll buy it regardless of price. Just don't trot out a bunch of bull justifying these inflated prices for e-books when common sense would tell anyone that the price of a physical book is going to be higher than an electronic version, but an electronic version 'near' the price of a physical book... baloney!

Well, clearly you are wrong. The cost of printing, warehousing, delivery and returns is a small percentage of the total cost of the book, with Apple taking 30%, this is more than cancelling that out. In addition, the suggested list prices for new eBooks are half the list prices for new print books - so where is your complaint?

Exactly. I almost always either purchase paperbacks or buy the hard covers when they go on sale at B&N. The paperbacks typically cost about $5 and the discount hardcovers costs about $7.

I have not purchased a e-book reader yet for precisely this reason. I have to shell out $250 on a Nook (There is no way I'm buying an iPad) and then have to pay more for e-books than I would for a hard copy? Most e-book costs more than paperbacks on both Amazon and B&N. The only way I'm going to buy a digital reader is if I am able to make up the cost of the device in reduced book price. Forget $13, I'm not paying more than $3 for a e-book that's available for $5 in hard copy. I should be able to go to B&N or Amazon or the publisher and simply download the book to my device/computer. They should be passing on all the savings on reduced costs (inventory/storage/shipping etc) to me.

Of course there are plenty of people that buy books as soon as they come out, and they would obviously expect to pay more - just as they do now. But that cost too should be significantly less than when they purchase hard copies.

The other problem I have with e-books is that it can't be shared legally. The Nook allows you to lend a book, but in practice they have crippled it so badly, it's almost as good as not having it.

The comparison is to hardcover new release prices because the price listed is for ebooks coming out at the same time as new releases. Macmillan and others have stated their intention to lower the price over time for a title to match the physical book editions. So when a paperback version of a book does come out, the ebook should be priced to match.

This is what they say they will do. We'll just have to wait to see if they were being genuine.

There is a large market for e-book rentals like movie rentals, people read for enjoyment and then really have no further use for it. (if they want to keep it, then they get to apply the rental price to the e-purchase price). The vast electronic library would be nearly instantly available to anyone with a device and a net connection.

SO by that logic you want purchase something, use it for it's intended purpose and then decide you don't want it anymore. And you want this cost to be less because you'll only use the product for its intended purpose once. Ermmmm.... When you buy a book, your paying for the content, for the entertainment, the means of delivery is irrelevant - the content is what you're purchasing. Once you've got that content in your brain, you don't erase it from your brain - the experience remains.

It's not like a car or a tux hire - the end product is not purely physical - it's the content, which once consumed stays with you forever.

What is with people wanting something for nothing? That's the price - pay it, or don't pay it. But don't claim the 'right' to reduced pricing or claim that content creators are 'greedy' for wanting to make a profit for their work?